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**Source:** [https://www.reddit.com/r/wallstreetbetsOGs/comments/om7h73/trade_like_a_professional_breakout_swing_trading/](https://www.reddit.com/r/wallstreetbetsOGs/comments/om7h73/trade_like_a_professional_breakout_swing_trading/)
**Type:** #litnote #todevelop [[Other/Obsidian Starter Vault(Second Brain)/003 RESOURCES/Trading]]

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- Gambling doesn't require study. Want to make steady income from the market? Market demands work from you to understand it. Success is not easy. Especially, in a competitive markets like this, where you are not only against other human beings but also against the smartest technological tools.
- Why you don't make money?
	- **Chasing memes and hot stocks.**
		- Not thinking for yourself and copying what everyone else is doing
		- Looking at the fundaments when you want to trade short-term
		- Fundamentals don't mean shit in short-term, technicals matter
		- Don't mix long-term strategy with short term trading
	- **Don't trade slow megacap stocks with small account**
		- Trade the fast stocks not the ones that rarely move
		- With a small account don't look at the stocks with ADR less than 5%
	- **Don't touch options until you are professional**
		- Wanna gamble? do it. 
		- *Leverage and margin is something that needs to be earned, not used just because it is there.*
	- **Think & act like a professional**
		- Be process oriented. Improve your trading process rather than chasing the next hot stock
		- Learn, practice, and make money. Improve on your system. 

- Does technical analysis work?
	- People who say otherwise don't know what they are talking about. It's the only way. The chart has helped a lot of traders make fortune. 
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## The strategy
- Strong momentum stocks. We buy high and sell higher
- High ADR. above 8%. Minimum 5%
- Consolidation:
	- Big move upwards and then sideways trading with tight range
	- Looking for ideal flagging pattern **pennant**
	- Moving averages: That are bouncing off the their 20 day SMA         
	- Strong breakout from range on high volume.
- Employ only during rising bull market, or possible sideways market. Breakouts don't give good results in declining market.
- Stop loss: Use trailing stop loss or 10 day sma or first day low.

- Why prefer swing trading
	- Gives you more freedom and time in life. You don't have to be sitting infront of the screen for whole days.

Stocks in trading range means, there's buyers and sellers balance. it will not take much buying pressure to push the market up in bull market and selling pressure to pull the market down in bear market. 

Stocks move like staircase. They don't go straight up or down. They go up, trade in range and breakout. 

Timing your entries in volatile market condition of stocks give you asymmetrical risk trade.